After experiencing 40 percent month-over-month customer growth for the last two quarters, Fair is now in the Windy City.
Fair, the used-vehicle subscription company that has had its app in the Apple Store for a year, launched in Chicago on Thursday. According to a news release, the company has partnered with dealers such as Chevrolet of Homewood, 94 Nissan of South Holland, Chicago Northside Toyota, Berman Auto Group and McGrath Auto Group to accelerate its expansion and offer consumers more than 40 brands of cars, trucks and SUVs, including eco-friendly and luxury models, starting under $190 per month.
With Fair, consumers can sign up for a vehicle on their smartphone, drive it as long they want, and turn it in when they want with no termination penalty. Customers can drive the vehicle of their choice for a monthly fee and without a long-term contract.
Fair provides 24/7 roadside assistance, a limited warranty and routine maintenance, which means oil and filter changes, tire rotations and multi-point inspections are all covered. Fair also covers title and registration.
For an additional fee, customers also can add Fair insurance to keep vehicle-related expenses in one place.
Of course, auto finance companies want their customers to send payments as dictated by the agreement finalized at delivery. But the latest survey from BillingTree showed that providers realize how they can help their contract holders maintain monthly commitments is changing.
BillingTree recently announced the key findings of its 2018 Financial Services Operations and Technology survey. The results from participants at small to large credit unions, banks and auto finance companies showed continued plans to adopt mobile and automated payment technologies, including payment via mobile apps, text and Interactive Voice Response (IVR).
The report, conducted during the second quarter, found credit/debit card payment acceptance via online portal and automated forms was the most common practice, offered at more than 60 percent of institutions.
The results also noted that utilization of IVR saw a significant increase, jumping to 45 percent compared with 25 percent in the past.
Planned adoption of new technology and practices saw online portal and mobile both tied at around 35 percent each, with text alerts and payments near 20 percent.
A full 90 percent of those surveyed currently don’t use a convenience fee model to offset payment processing costs, and merely 20 percent were considering this practice in the future.
BillingTree pointed out that growing the base of members/customers and member/customer retention were the two top factors respondents cited as critical to growth and profitability for financial services organizations in 2018, consistent with prior surveys.
This year, cost reduction gave up a third-place ranking to new technologies enhancing payment collection effectiveness, followed by software integrations to enable automatic posting.
BillingTree added the rise in the rank of technology and integrations suggests that financial service organizations regard technology as a more important component in their overall business strategy than in prior years.
“This is the fourth Financial Services Industry survey commissioned by BillingTree capturing trends and revealing that most financial institutions continue to trust and adopt integrated payment technology and services,” BillingTree vice president of sales and business development Jason Hiland said.
“Mobile, text and online payments are now expected by consumers/members and offering each channel supports the Financial Institution’s top concerns, consumer/member retention and growth,” Hiland continued.
To request a complimentary copy of the 2018 Financial Services Operations and Technology survey results, go to this website.
Rather than further diversify its portfolio, Ally Financial announced on Wednesday that it will condense its sphere.
In an effort to leverage its strengths, better optimize capital allocation and provide even more focused dealer support, Ally said it is taking strategic actions that will enable it to concentrate more on its core business operations. The company explained the renewed focus on its core strengths is at the heart of its recent decision to exit both the transportation equipment finance and the RV commercial and consumer lines of business.
“These actions allow us to put more energy and more resources into our core businesses and provide the greatest value to all of our stakeholders from dealers and consumers to shareholders and employees,’’ said Doug Timmerman, president of auto finance for Ally.
“We have a long history in auto finance, and it’s what we do best, so maximizing the resources we have in support of dealers is the right step,” Timmerman continued.
The company indicated that Ally RV dealers were notified of the decision earlier in August, with commercial dealers being notified personally.
“Our goal is to help dealers transition to new finance providers as smoothly as possible so they can maintain continuity of their businesses,” Timmerman said.
Ally said it is continuing to service consumer retail contracts, but will notify them if there are any changes.
Ally’s Commercial Services Group, which finances and leases commercial vehicles from small cars to heavy duty trucks, is not affected by these changes and remains a vital component of Ally’s value to a growing number of dealers in the space.
Transportation equipment finance covers marine vessels, airplanes, rail cars and other non-vehicle assets that are originated directly with the customer.
Ally stressed that this decision to exit the RV and transportation equipment finance lines of business “had nothing to do with projections for either industry.”
Sometimes, making a move to the “closer” position pays off.
Like in 2002, when ace pitcher and 2015 Hall of Fame inductee John Smoltz promptly posted 55 saves, a National League record, during his first full year as closer for the Atlanta Braves.
But in automotive, there has also been some success with the opposite approach.
Or as Roadster puts it, moving the dealership F&I manager from “closer to product educator.”
The thinking is, instead of having one person come in at the very end of the car-buying process and perhaps overwhelm the already tired customer with F&I information — or an F&I sales pitch — the better route could be to educate and provide context throughout.
And empower more of the sales staff, including the front line, to do those tasks along the way.
As Roadster chief marketing officer Michelle Denogean recalls a dealer saying, “the opportunity that’s out there is not to eliminate F&I; there’s an opportunity to expand the number of people that are able to represent it.”
‘Educate customer upfront’
The need to understand the shopper’s lifestyle needs and walking them through the process is still there. But the point is to, “educate the customer upfront, so they understand exactly what is available,” Denogean said in a phone interview earlier this month.
“I think the big shift in that has been more on the consumer demand side, where people are very accustomed to having access to all sorts of information online,” she said. “And so, being able to educate, research, make selections, decisions at your own leisure that we see in a lot of different industries just sort of thrust itself into the (auto) industry. And those that are embracing it are seeing these huge rewards from just having that education piece.”
One of which is having a “more open” and “happier” consumer that understands their F&I options when he or she steps into the finance office, Denogean said, recalling a conversation with a dealer.
The F&I process has long been a pain point. So why is this shift happening now?
“I think a lot of dealerships are also very aware, as you're digitizing the sales process, there are different choke points or funnel points in the existing processes,” said Roadster chief executive office Andy Moss, who also joined the call. “I hear again and again that on a busy Saturday, it could be waiting to get into the F&I office is what’s causing that process to take a long as it does for a customer to — even when they’re ready to buy a car — complete that process.”
Efficiency of operations
But, still, the dealership has to strike a balance. There is still a need to explain the benefits of F&I products to the consumer and, in basic business sense, maintain dealership F&I penetration, Moss said.
And Roadster aims to address that with its software.
“How do you balance that with enabling either your salespeople or your sales managers and desk managers with tools that allow them to share that with the customer and maybe even complete some of those transactions without having to line up to go through the more traditional F&I office?” Moss said.
“We have dealers that are every extreme of that. Empowering the sales person to do nearly all of that through a very traditional F&I office,” he said. “Our software supports all of those. But I do think the trend is there to move it further up the chain from introducing and maybe even going further with representing those products to the consumer.”
Denogean adds: “There’s demand for the efficiency; how do we save time in the process – (for) both sides, really? If a lot of time is there waiting for the F&I office to become available to finish your deal, then it sort of starts to feed into that perception that you’re spending your entire day at the dealership.”
The upfront education can make the sales process quicker, she said, “but it also changes the dynamic when they can be exposed ahead of time, side-by-side with the person they built the relationship with, quite honestly, at the beginning of their relationship with the dealership.”
So, might this new approach impact how and whom dealers hire? That’s to be determined. But Denogean said it can change existing employee tasking within a dealership.
For instance, instead of the F&I manager being the one of the only ones to know about the various F&I products offered, that manager could bestow that knowledge to 10 to 15 employees.
“Those that really embrace it are seeing that as an opportunity to extend their capabilities,” she said. “And they’re becoming much more (of) educators.”
Moss noted that while that might it not be universal, he has seen stores that have reduced traditional F&I office-specific employees, instead redeploying those folks to sales management posts.
Some dealers are getting tools into the hands of frontline salespeople to free up time for desk and sales managers, Moss points out. Technology can come into play through this empowering of frontline folks.
“Because in an old-school model, the numbers weren’t easily at hand. They probably only had a system that you could guarantee was going to be accurate if the desk manager was accessing it and the only one at the dealership that had the ability to get into that and understand it, because it was pretty complex. By democratizing, if you like, the presentation of that information, you’re kind of making it so a sales person — or an end consumer themselves from home — can use the same tools to see that data and understand and have it explained,” Moss said.
“But you can do it in a way where there are guardrails around it, where the salesperson can’t mess something up and either screw up the profitability of a deal or miss the opportunity to introduce the consumer to a service and protection plan product,” he said.
Moss sees a “redeployment of resources that will happen over time that actually makes the whole dealership be much more customer-centric.”
Denogean adds that dealership “able to do more with the same,” making the existing personnel base more efficient by empowering the front line
Time, awareness, context
The combination of in-person information sharing and giving the consumer the time and space to do research tends to be a combination that works, Denogean said. And so does providing F&I context throughout the process.
“It’s having several bites at the apple, so to speak. So, I can see it online, I can educate myself, I can understand what’s available. Maybe I’ll add something because it’s very compelling to my online deal that I started. When I come into the store, now I have some familiarity in talking to the salesperson about my situation,” she said.
And that information can be layered throughout the process, as Denogean put it, providing a means to constantly educate the consumer throughout.
You raise the comfort level with, and understanding of, the F&I product.
Roadster is also seeing some dealerships working this angle on the trade-in side too, so they can possibly identify F&I products that could potentially fit the need of that consumer.
“Again, because they have the relationship with the customer from the beginning, they have a unique perspective and the relationship and commentary that they’re having along the way, to identify in a very natural way what products might be important to that customer,” Denogean said
For example, during the trade-in process, the salesperson might identify something as simple as the fact that the customer might rub their trade-in car’s tires against the curb, then asking if a tire protection plan would be of interest to the shopper, Denogean said.
By the numbers
So how much more likely are consumers to self-select F&I products when they’ve been educated up front?
“The numbers that we are seeing right now — it’s self-selection so it’s not the end state of what they actually end up with in the order — but I think they’re pretty on par with what is happening before somebody gets into F&I … just from conversations that are happening in transit,” Denogean said. “So we’re seeing 25 percent to 30 percent of people just attaching on their own without an interaction.
“And then you add on the interaction with the salesperson, then you add on the F&I (desk), and we can start to see it layers up. But I think in a world where nobody thought customers would actually select those things, that’s a meaningful number to look at and we’re constantly monitoring,” Denogean said.
Roadster has heard from dealer partners that F&I penetration for consumers going the online route is, “on par or higher, depending on how they’re using the tool to further that conversation,” Denogean said.
Many dealers are seeing F&I penetration and profit gains, thanks to the consumer being more educated about those products and in a better mood when they arrive in F&I and “they’re more open to hearing what else there is to offer,” she said.
As Smoltz and the Braves could tell you, openness to change can bear strong results.
TransUnion is leveraging a relationship with one of its strategic partners to cater to consumers who expect results — like the availability of auto financing — to appear within a few swipes on a smartphone.
To meet the evolving needs of consumers, TransUnion recently launched Mobile Offers Now, a solution designed to help financial institutions respond to increasing consumer expectations to be served when and where they choose.
Mobile Offers Now leverages TransUnion’s existing Find My Offer platform to provide consumers with instant access to prequalified credit offers through a simplified, SMS-initiated, mobile experience. The technology seamlessly can integrate real-time credit decisioning with consumer and device authentication, creating a secure, personalized and dynamic user experience.
“To stay competitive in an increasingly digital world, financial institutions know that they need to reduce unnecessary friction and poor experiences to attract and keep good consumers,” said Dane Mauldin, chief product officer at TransUnion.
“Consumers are demanding faster ways to find offers and apply for credit when and where they need it,” Maudlin continued. “With Mobile Offers Now, they may simply text a key word to instantly check for prequalified offers across numerous credit products, providing a path to credit through a completely digital application process.”
Mobile Offers Now is enabled through a strategic partnership with iLendx. The platform is the first release within a turnkey digital lending suite that is fully integrated with TransUnion’s decision technology.
The companies explained these solutions are intended to replace the traditional credit application with an intuitive workflow that takes the consumer from prequalification to funding in just minutes, with the option to deepen the relationship by offering auto, HELOC, credit card or unsecured lending products during a single session.
Based in Texas, the team at iLendx creates innovative digital lending and banking capabilities for financial institutions. As a strategic partner of TransUnion, iLendx, co-developed Mobile Offers Now a platform that can deliver credit offers directly to a bank’s customers through mobile device technology.
iLendx is also the creator of the Digital Lending Experience (DLX), a subscription-based platform for financial intuitions designed to facilitate the origination of auto financing, credit cards, unsecured loans, HELOCs and new accounts opening for checking and savings products.
“This solution will enable financial institutions to quickly expand their digital presence and adopt new channels for attracting and retaining customers who expect technology and convenience,” said Andy Ivankovich, chief executive officer of iLendx.
“Less than 10 percent of banks can originate loans digitally, and many banks face barriers to implementing their own digital platform. The suite of digital lending solutions will help financial institutions reach new demographics, enter new markets and reduce origination costs while boosting their bottom line,” Ivankovich went on to say.
For more information about Mobile Offers Now and TransUnion’s new digital lending suite of solutions, go to this website.
While the auto finance industry certainly is taking steps to reduce its exposure, the latest analysis from LexisNexis Risk Solutions showed how much rampant fraud still is happening in the greater retail sector.
In fact, findings from its comprehensive "2018 True Cost of Fraud" report indicated fraud is escalating at an “unprecedented” pace within industry segments already operating on very thin margins.
The LexisNexis Fraud Multiplier, which measures the cost for each dollar of fraud loss, found that this year, every dollar of fraud cost merchants $2.94, up from $2.77 a year ago, a 6-percent increase. The report also found the volume of successful and thwarted fraudulent attempts rising steeply at the companies surveyed — from a monthly average of 238 to 306 successful fraudulent transactions, year-on-year, and from 257 to 313 prevented fraudulent transactions.
Analysts pointed out that mobile commerce continues to be the sector most susceptible to fraud, particularly identity fraud. Mid- to large-size mobile commerce merchants that sell digital goods see 39 percent of the fraud losses from identity theft, including synthetic identities.
Though these merchants appear to have shown signs of investing in fraud prevention solutions in the past year, LexisNexis Risk Solutions noted that many still struggle with identity fraud. This is likely due to the types of solutions that these merchants are implementing.
“The hotly competitive retail landscape means merchants must meet customer expectations for convenience and continually drive business growth,” said Kimberly Sutherland, senior director, fraud and identity management strategy at LexisNexis Risk Solutions. “However, these key drivers also have increased risk for identity-related fraud, especially with the rise of synthetic identities and the volume of botnet orders.
“Therefore, it’s crucial for retailers to not just invest in a large number of fraud prevention solutions, but the right combination and layering of the solutions to defend against different threats,” Sutherland continued.
“Retailers are beginning to demand solutions that combine physical identity data with digital identity data so that they have 360 degree view to know if the person they are doing business with really is that person,” she went on to say.
Other findings of the report include:
• Digital goods merchants who layer core, identity and fraud transaction solutions have lower fraud costs ($2.88 for every $1 of fraud) than those that use only a limited set of core solutions (up to $3.61 per $1 of fraud).
• The LexisNexis Fraud Multiplier has risen most sharply, year-on-year, among those selling digital goods through the mobile channel. For every $1 of fraud, mid- to large-mobile commerce merchants selling digital goods are hit with an average cost of $3.29, as opposed to their physical goods-only counterparts at $2.78.
“Retailers are more likely to be tracking where they’ve successfully thwarted fraud rather than also tracking where they’ve been able to prevent it from occurring. This approach lessens the overall effectiveness of preventing fraud, given that fraudsters are adept at testing for areas that are less of a focus by merchants, and change their attack points accordingly,” Sutherland added.
This is the ninth annual comprehensive research study on U.S. merchant fraud produced by LexisNexis Risk Solution. The methodology of this study targeted U.S. retailers with a comprehensive survey of 703 risk and fraud executives conducted during March. Respondents represented all channels, company sizes, industry segments and payment methods.
For more information, visit https://risk.lexisnexis.com or https://www.relx.com/.
Equifax gave a new executive position to one of the first honorees of Auto Remarketing’s 40 Under 40.
The credit bureau named Jennifer Reid as its vice president — automotive marketing and strategy lead – U.S. information solutions (USIS). In this role, Reid will be responsible for the development of Equifax’s automotive growth strategies, as well as overseeing specific marketing plans and initiatives. Equifax indicated this duty includes understanding competitive automotive industry market dynamics and trends, key customer insights, new product innovations and pricing and channel strategies.
Reid brings nearly two decades of diverse automotive experience to her new role, working for and with dealerships, industry associations and automotive finance companies.
Reid joined Equifax Automotive Services in April of 2013 from the automotive lending industry, where she spent six years focused on both OEM and indirect finnancing business for JP Morgan Chase. Reid also spent three years working with large automotive strategic partners and resellers. Before that she spent two years in product marketing for Equifax Automotive Services.
“We're excited to have Jenn leading our U.S. automotive marketing team as her rich and diverse expertise will help us continue to build the right solution sets so we can deliver value that amplifies profit potential for our partners,” said Craig Crabtree, senior vice president and general manger of Equifax Automotive Services.
“Jenn has lived and breathed nearly every aspect of the broader automotive ecosystem, and because of that she is extremely qualified to lead a dedicated team of professionals committed to driving great value to the industry,” Crabtree went on to say.
Reid was among the first 40 industry leaders honored through Auto Remarketing’s 40 Under 40 program. The next cohort will be highlighted in the Sept. 1 edition of the magazine as well as during Used Car Week, which runs Nov. 12-16 in Scottsdale, Ariz.
Ally Financial is diversifying the industry backgrounds of its board members.
Ally announced that Brian Sharples and Trynka Shineman have been appointed to its board of directors, effective last Friday. The company highlighted the two executives have deep experience with global digital companies and will bring well-established expertise in technology and innovation to Ally’s board.
Sharples is co-founder and chairman of Twyla, a privately held company that provides a new way to discover and buy art. Before co-founding Twyla, he was co-founder, chairman and chief executive officer of HomeAway, a global online marketplace for the vacation rental industry.
Shineman is chief executive officer of Vistaprint, a company that provides printing and digital marketing services for more than 17 million micro businesses globally. Vistaprint is a subsidiary of Cimpress N.V., where Shineman sits on the management board.
“As we look to further enhance Ally’s position as a leading digital financial services company, adding directors who have deep knowledge and expertise growing digital companies is extremely valuable,” said Jeffrey Brown, chief executive officer at Ally. “I am pleased to welcome Brian and Trynka to the Ally board of directors and look forward to their perspectives and contributions.”
Before co-founding Twyla and HomeAway, Sharples served as president and chief executive officer of IntelliQuest Information Group Inc., a supplier of marketing data and research to technology companies. He began his career as a consultant at Bain & Company, a global management consulting firm, and has engaged in a number of entrepreneurial and investment activities since that time.
Sharples currently serves on the board of directors for GoDaddy, Twyla, Fexy Media and RVshare.
Prior to being named CEO of Vistaprint, Shineman served in a number of roles at the company, including chief customer officer, executive vice president for global marketing and president. She serves on the board of trustees of the Massachusetts Technology Leadership Council (MassTLC), a leading regional technology association that drives growth and innovation by connecting tech leaders, investors, academics and policymakers.
“Ally is committed to building and sustaining an engaged Board of Directors with a diverse array of backgrounds and skills that will continue to support management in creating long-term value for our shareholders,” said Fritz Hobbs, chairman of the board of Ally. “We are delighted to welcome Brian and Trynka.”
Toyota Financial Services didn’t look far for a replacement when one of the captive’s top leaders revealed his plan for retirement.
This week, TFS announced that Mike Groff, the company’s president and chief executive officer, member of the company’s board of directors, and chief executive officer of the Americas Region of Toyota Financial Services International Corp. (TFSIC), the direct parent of the company, will retire from these positions effective Aug. 31.
Officials added that Groff will serve as executive adviser to Toyota Financial Services until Nov. 16.
Appointed to replace Groff is Mark Templin.
Templin first joined Toyota in 1990 and has served as chairman of the board of directors of Toyota Motor Credit Corp. (TMCC) since May 2016. He also currently serves and is expected to continue to serve as director, president and chief operating officer of TFSIC and director and group chief operating officer of Toyota Financial Services Corp., From April 2013 to December 2017, Templin also served as managing officer of Toyota Motor Corp.
“Mark brings a global depth of knowledge and experience in both the finance and automotive sides of the business,” Groff said. “He understands how to meet the needs of our dealer partners and our distributor affiliates. His Lexus background means he knows how to deliver best-in-class customer experiences. I know the company will be in good hands with Mark at the helm.”
Groff joined the fledgling Toyota Motor Credit Corp. in 1983 as the company’s seventh employee. His job as an operations administrator entailed a wide range of responsibilities as the company started operations and began to grow.
Groff then transferred to Toyota Motor Insurance Services (TMIS) in 1991, and held positions in product development and management. After three years with TMIS, Groff transferred back to TMCC and held a series of progressive leadership positions in the areas of sales, marketing, strategic planning, information technology and customer service. He was instrumental in the rebranding of TMCC and TMIS as Toyota Financial Services.
In 2013, Groff was named the company’s president and CEO. Under his leadership, Toyota Financial Services joined Toyota Motor North America (TMNA) in a successful relocation of its headquarters to a modern campus in Plano, Texas.
Groff has led continued growth at TFS, and the company now ranks as one of the nation’s largest auto finance providers. TFS has more than 4 million active customer accounts, more than 8 million insurance agreements in force, total assets of more than $120 billion, and employs approximately 3,300 team members across the country.
In addition, he was responsible for Toyota Financial Services operations in Canada, Mexico, Puerto Rico, Argentina, Brazil and Venezuela.
Under Groff’s leadership, TFS expanded its already strong commitment to corporate social responsibility. The company introduced a series of programs to support underserved youth, provide scholarships and promote financial education among young people. TFS is a major sponsor of the Boys and Girls Clubs of America and the Girl Scouts of the USA where the company introduced the “Driving My Financial Future” campaign.
Groff, a national trustee for the Boys and Girls Clubs of America, coupled the company’s philanthropic donations with opportunities for team member involvement. Under his leadership, Toyota Financial Services received the prestigious Points of Light Foundation Civic 50 award four times. The Civic 50 recognizes the 50 most community-minded companies in the nation.
The company highlighted Templin will bring a depth of experience to his new role as president and CEO of TFS.
Since joining Toyota Motor Sales (TMS) in 1990, he has held a number of positions. Templin previously served as group vice president and general manager of the Lexus Division for TMS, overseeing all aspects of Lexus’ U.S. automotive operations, including sales and marketing, retail development, customer satisfaction and product planning. His responsibilities included coordinating sales activities, dealer relations, parts and service operations, and marketing operations of four regional offices around the country.
He concurrently served as general manager of the Lexus Planning Division, TMC, working closely with international Lexus affiliates to enhance and bring more awareness of the Lexus brand worldwide.
Templin also previously served as general manager for the Lexus Southern Area, assistant general manager for both the Southern and Western Area Lexus offices, sales administration manager, retail operations manager at Lexus’ national headquarters in Torrance, Calif., and vice president of parts, service, customer satisfaction and training for the Lexus division.
Templin also served as VP of Lexus Marketing and VP of Scion, where he was responsible for all Scion activities.
“I am honored to lead Toyota Financial Services operations in the U.S. and the Americas Region,” Templin said. “Mike has positioned the company for continued success, and I look forward to building on our strong heritage of delivering the best products and services to meet the needs of our customers and dealer partners.
I know that we can be a great partner to the automotive side of the business in achieving Akio Toyoda’s vision of mobility for all,” Templin went on to say.
More than 100,000 credit union members now could have a clear path to financing a vehicle purchase if they use online retailer Carvana.
Firstmark Credit Union — founded in 1932 by 10 teachers within the San Antonio Independent School District — recently partnered with Carvana. Members now have access to a Carvana + Firstmark co-branded website where they can apply their Firstmark loan pre-approval to more than 12,000 Carvana vehicles and can complete their purchase online in a matter of minutes.
Through the co-branded Carvana website members also can:
— Browse certified inventory with low mileage, no accident history and 150-point inspection.
— Shop from home and buy online with delivery or pickup available as soon as the next day.
— Get more for less and save an average of $1,461 versus Kelley Blue Book retail value.
— Buy with confidence and get a seven-day money back guarantee and a 100-day warranty.
— Finance with ease with Firstmark to secure a Carvana purchase.
Firstmark Credit Union chief operations officer Gregg Thorne explained that Firstmark is committed to providing the best products and services to members, and a partnership with Carvana is just another example of its commitment to members.
“We are excited to help our members with auto financing and provide them with the best possible rate,” Thorne said. “Teaming up with Carvana gives our members a smart and easy car buying solution.”
More details can be found at www.carvana.com/firstmarkcu.
